Start the new year right with these 15+ top Orange County things to do in January.
Cafe Sevilla Now Open.
The Spanish restaurant and tapas bar with locations in San Diego and Long Beach launches its first Orange County restaurant at The Triangle in Costa Mesa. Guests can expect Spanish fare and festive drinks, live Latin music nightly and vibrant Flamenco dinner shows which vividly display the soul of Spain. Open daily from 4 p.m.-2 a.m.; brunch served on the weekends 11 a.m.-3 p.m. 1870 Harbor Blvd., Costa Mesa, 888.738.4552. cafesevilla.com
Queen Mary Christmas Through Jan. 1.
Enjoy the holiday spirit aboard the historic Queen Mary as it transforms into an epic adventure-filled wonderland. Highlights include live entertainment, festive libations, strolling performers, sweet treats, light shows, gingerbread and stocking decorating, ice-skating, and shopping. There’s also a meet-and-greet with Ol’ Saint Nick in the Captain’s Quarters. See website for schedule and ticket prices. $20 on-site parking. Queen Mary, 1126 Queens Hwy., Long Beach, 800.437.2934. queenmary.com
Monster Energy AMA Supercross Jan. 4, 18.
The world’s premier off-road motorcycle championship series returns to Anaheim to kick off the 2020 season. Arrive early for the pre-race FanFest for an opportunity to get an autograph and see the riders, the teams and their bikes. See website for full event schedule. Doors open noon. $25+. Angel Stadium, 2000 E. Gene Autry Way, Anaheim, 800.352.0212. supercrosslive.com
Capistrano Lights Through Jan. 6.
Mission San Juan Capistrano’s annual holiday event, Capistrano Lights, is an all-ages family event where guests can experience the festive spirit of the season. The event includes nightly musical tree lighting and decorative light displays. $10 adults, $9 seniors 60+, $7 children ages 4-11. Mission San Juan Capistrano, 26801 Ortega Hwy., San Juan Capistrano, 949.234.1300. missionsjc.com
Blue Man Group Jan. 7-12.
Featuring pulsing, original music, custom-made instruments, surprise audience interaction and hilarious absurdity, join the Blue Man Group in a joyful experience that unites audiences of all ages. See website for showtimes. $26+. 600 Town Center Drive, Costa Mesa, 714.556.2787. scfta.org
Art of Garfunkel Jan. 11.
Grab your tickets to see singer Art Garfunkel, who has been described as a “beautiful countertenor” by The New York Times. Garfunkel has made an indelible mark on the music world, both as a solo artist and as one of the unrivaled duo, Simon & Garfunkel. 8 p.m. $39+. 600 Town Center Drive, Costa Mesa, 714.556.2787. scfta.org
Garden-to-Table with David Rizzo Jan. 11.
Come meet and learn from well-known horticulturist David Rizzo as he takes lead in an interactive discussion about what, where and when to plant, prune, feed and harvest. Bring your questions as well as your own tips and tricks, as audience participation is encouraged. 9-10 a.m. Free. 2301 San Joaquin Hills Road, Corona del Mar, 949.640.5800. rogersgardens.com
Newport Beach’s Restaurant Week Jan. 13-26.
Showcasing Newport Beach as O.C.’s premier dining destination, participating restaurants will offer special, two- or three-course, prix-fixe menus with lunches available starting at $10 and dinners starting at $20. See website for participating restaurants. dinenb.com
LIT Cafe Book Drive Through Jan. 15.
The restaurant invites locals and visitors to stop by the restaurant to dine for breakfast or lunch and asks that new or used book donations for kids and teens ages five through 18 are brought along. To provide some extra incentive, anyone who brings in a book donation will receive a goodie bag of Ms. T’s sea salt semi-sweet chocolate chip cookies. 1071 N. Tustin Ave., Suite #100, Anaheim, 657.208.3485. litcafeoc.com
Pacific Symphony and Violinist Clara-Jumi Kang Jan. 16-18.
Ring in 2020 with Pacific Symphony for a night of music written and inspired by Beethoven. With guest conductor Christian Arming manning the podium, the evening kicks off with a show-stopping performance of Beethoven’s iconic Violin Concerto by internationally acclaimed violinist Clara-Jumi Kang. Afterward, Dvořák’s beloved Symphony No. 8 brings the program to an exhilarating end in a tour de force of musical fervor. Doors open at 6:45 p.m., preview talk with Alan Chapman at 7 p.m., concert 8 p.m. $25+. Renée and Henry Segerstrom Concert Hall, 600 Town Center Drive, Costa Mesa, 714.755.5799. scfta.org
Dimensions of Form: Tamayo and Mixografia Through Jan. 19.
Fifty prints by modern master Rufino Tamayo, on loan from the Mixografia gallery in Los Angeles, depict silhouetted figures, celestial bodies and the seprent-god Quetzalcoatl. On view through January 19. Tu-Su 10 a.m.-4 p.m. $13-$15 adults, $10-$12 students and seniors 62+, free for ages 12 and under. Bowers Museum, 2002 N. Main St., Santa Ana, 714.567.3600. bowers.org
Cakebread Winemaker Dinner Jan. 23.
AVEO Table + Bar offers its first winemaker dinner of 2020 with Cakebread Cellar Vineyards. Winery co-owner and chief winemaker Bruce Cakebread will be present to connect with guests and unveil a new red blend. Chef Donald Lockhart prepared a five-course dinner paired with exclusive bottles from Cakebread Cellars including the all-new Mullen Road Blend from Columbia Valley. 6 p.m. $160; seating is extremely limited and reservations are required. To reserve, email Mado at email@example.com. 1 Monarch Beach Resort, Dana Point, 800.722.1543. monarchbeachresort.com
Lillias White Jan. 23-25.
Tony and Emmy Award-winner Lillias White returns to Segerstrom Center’s Cabaret Series with this autobiographical show filled with musical highlights from her life and career. With her powerhouse voice and exuberant stage presence, White has won accolades for her show-stopping performances on the Broadway stage, on television and in films. The New York Times proclaims “Lillias White is a singer who makes the most challenging vocal feats look almost easy.” 7:30 p.m. $89+. Samueli Theater, 600 Town Center Drive, Costa Mesa, 714.556.2787. scfta.org
Chinese New Year: Shanghai Nights Jan. 25.
Celebrate Chinese New Year aboard the majestic Queen Mary. Chinese New Year: Shanghai Nights celebrates the Year of the Rat with traditional Chinese culture, cuisine and entertainment. Located in the Grand Salon is the limited seating buffet dinner and show. Performances by Wushu Shaolin Entertainment includes Chinese martial arts, dragon and lion dances, ribbon dances and Face Changer. First seating: 4-6 p.m., second seating: 8-10 p.m. $103-$260. 1126 Queens Hwy., Long Beach, 800.437.2934. queenmary.com
Cooking Class at Adya Jan. 25.
Watch chef-owner Shachi Mehra lead an interactive cooking class with step-by-step instruction of healthy dishes using 2020 produce trends with Melissa’s Produce. 11 a.m.-1 p.m. $55. Anaheim Packing House, 440 S. Anaheim Blvd., Anaheim, 714.533.2392. adyaoc.com
Museums Free-For-All Jan. 25.
SoCal Museums announces the 15th annual Museums Free-for-All where more than 40 museums—presenting art, cultural heritage, natural history and science—open their doors and invite visitors to attend free of charge. Participating Orange County museums are Muckenthaler Cultural Center and OCMA (Orange County Museum of Art). This offer is for general museum admission only and does not apply to specially ticketed exhibitions. Regular parking fees apply at each museum. Consult individual museum websites for hours, directions, and other visitor information. Free admission. socalmuseums.org
Spanish Wine Dinner Jan. 31.
The culinary team at Eats Kitchen & Bar is cooking up a Spanish wine dinner. Starter offerings are tapas to be shared family-style at the table, including Jamones y Embutidos, Olives en Escabeche, Escalivada, Papas Arrugadas y Mojo Rojo and Catalan-style bread with tomato, to be accompanied by Albariño. Next follows Gazpacho Andalusian accompanied by Manzanilla sherry or sparkling rose. The following course is a wood-grilled baby squid to be enjoyed with tempranillo, merlot or grenache blend from Navarra. Then comes the showpiece whole roasted suckling pig served with Bomba rice and other accompaniments, along with Tempranillo from Rioja. Dessert is Spanish churros with warm chocolate sauce and cava sparkling wine. Call to make reservations. Reception 6:30 p.m., dinner 7 p.m. $85. Hotel Irvine, 17900 Jamboree Road, Irvine, 949.225.6780. hotelirvine.com
Arthur Beaumont: Art of the Sea Continuing.
Explore Bowers Museum’s newest exhibition, which features watercolors by Arthur Beaumont that capture the grandeur of the sea and vessels that sail on it. This exhibit includes works in the Irvine Museum Collection and is curated by James Irvine Swinden. On view through February 2. Tu-Su 10 a.m.-4 p.m. $13-$15 adults, $10-$12 students and seniors 62+, free for ages 12 and under. 2002 N. Main St., Santa Ana, 714.567.3600. bowers.org
Originally published here. Edited by Whitney Lauren Han.
It’s exciting to put a house on the market and to think about making new memories in new spaces, but we can have deep sentimental attachments to the homes we’re leaving behind, too. Growing emotions can help or hinder a sale, depending on how we manage them.
When it comes to the bottom line, homeowners need to know what it takes to avoid costly mistakes. Being mindful of these things and prepared for the process can help you avoid some of the most common mishaps when selling your house.
1. Overpricing Your Home
When inventory is low, like it is in the current market, it’s common to think buyers will pay whatever we ask for when we price our homes. Believe it or not, that’s far from the truth. Don’t forget that the buyer’s bank will send an appraisal to determine the fair value for your home. The bank will not lend more than what the house is worth, so be mindful that you might need to renegotiate the price after the appraisal. A real estate professional will help you to set the true value of your home.
2. Letting Your Emotions Interfere with the Sale
Today, most homeowners have been living in their houses for an average of 10 years (as shown in the graph below):This is several years longer than what used to be the norm, since many homeowners have been recouping from negative equity situations over the past 10 years. The side effect, however, is when you live for so long in one place, you may get even more emotionally attached to your space. If it’s the first home you bought after you got married or the house where your children grew up, it very likely means something extra special to you. Every room has memories and it’s hard to detach from the sentimental value.
For some homeowners, that makes it even harder to negotiate, separating the emotional value of the home from the fair market price. That’s why you need a real estate professional to help you with the negotiations in the process.
3. Not Staging Your Home
We’re generally quite proud of our décor and how we’ve customized our houses to make them our own personalized homes, but not all buyers will feel the same way about your design. That’s why it’s so important to make sure you stage your home with the buyer in mind. Buyers want to envision themselves in the space, so it truly feels like their own. They need to see themselves in the space with their furniture and keepsakes – not your pictures and decorations. Stage and declutter your home so they can visualize their own dreams as they walk through your house. A real estate professional can help you with tips to get your home ready to stage and sell.
Today’s seller’s market might be your best chance to make a move. If you’re considering selling your house, I can help you navigate through the process while avoiding common seller mistakes. Give me a call today.
Originally published here.
Whether you’re looking to buy or sell a home in 2020 or find the perfect rental, it helps to know what you’re up against. In many markets, homebuyers continue to find themselves frustrated, as the relatively few properties coming on the market aren’t meeting demand. The likelihood of continued low interest rates make it possible for more individuals to become homeowners for the first time, but fear of a recession and a desire for financial security makes many consumers hesitant to purchase a house.
Here’s what to expect from the housing market in 2020.
At the start of 2019, rising interest rates caused many homebuyers to halt their plans for a purchase, as they were unwilling to take on a financial burden they couldn’t afford. To ensure buyers remained active, mortgage lenders lowered their interest rates, which have, on average, been below 4% since May for 30-year, fixed-rate mortgages, according to Freddie Mac. They’re expected to remain low throughout 2020.
Still, some homebuyers are concerned about the future of the economy and their ability to make mortgage payments. Economists largely predict that a recession is still a ways out and not expected until 2021 or later, according to real estate information company Zillow’s July 2019 survey of more than 100 real estate and economic experts. However, a segment of the would-be homebuyer market remains skittish.
“Saying the word ‘recession’ is like saying ‘Beetlejuice’ three times. The more people talk about trade wars and recession, the more people back off (homebuying),” says Odeta Kushi, deputy chief economist for First American Financial Corporation, which provides title insurance and risk solutions for real estate transactions.
But concerns about the economy shouldn’t inhibit the housing market significantly, or at least not for long. Daryl Fairweather, chief economist for national real estate brokerage Redfin, says the low mortgage rates and the chance to buy a home now as opposed to later will be enough encouragement for homebuyers. “Once they see prices picking up, they’re going to get this fear of missing out,” she says.
The cities and metro areas where the population is growing fast due to new residents moving in are where you’re likely to see home prices increase the most. These markets, which Fairweather notes are more likely to be mid-tier cities in the Midwest or South, such as Charlotte, North Carolina, Charleston, South Carolina, and Richmond, Virginia, that are just a short flight from larger cities like the District of Columbia or Atlanta.
The influx of new residents certainly drives up property values as demand increases over the long term, but that means the buyers on the market are more likely to be transplants than lifelong locals. “Any time we see a big increase in migration, prices go up and locals may feel it become unaffordable for them,” Fairweather says.
The newest generation in the housing narrative, Generation Z, a group often defined as made up of those born between 1996 and 2010, is largely not ready to purchase a home yet. But expect some 18- to 22 year-olds, the oldest Gen Zers, to be a small portion of the market in 2020. Ryan Gorman, president and CEO of Coldwell Banker NRT, says the Gen Z individuals who are looking to buy now are early adopters, and they’re more likely house hunting in small or midsize Midwestern cities where the cost of living is low.
“That segment (of the generation) is able to purchase, and the inventory is there for them to purchase,” Gorman says.
Home sellers will likely benefit from the number of buyers encouraged by low interest rates, and home prices are expected to continue to trend upward. But don’t expect any home price explosions on a large scale.
“I don’t expect home price appreciation to be much of the story in 2020, but we’ll see a continuation of what we’ve been seeing,” Gorman says. He adds that home prices should grow and keep sellers and homeowners who are hoping for a rise in their property values happy. But prices should not grow so quickly that markets risk a price correction or buyers hit their price ceiling.
There aren’t expected to be many sellers in 2020, however. National real estate brokerage Re/Max reports that in October 2019, the inventory for homes for sale was 9% lower than the same month in 2018 across 54 metro areas. The low inventory trend, at least compared to the number of consumers looking to buy, is expected to continue through 2020. Many homeowners locked in low mortgage rates over the past decade, so many don’t feel the need to move; they’ve built equity in their homes and continue to have a low, fixed-rate mortgages with no need to refinance.
Plus, the baby boomer population appears to be focused on aging in place rather than downsizing or moving to different accommodations in retirement, Kushi says. Combined with the low mortgage rates they already have on their homes, seniors aren’t feeling much incentive to move.
New Construction and Development
With a large and growing number of homebuyers and a relatively small pool of home sellers, the only saving grace is new construction, which has been notoriously underproducing since the recession. Although new construction appears to be increasing, it still won’t be able to meet housing demand.
Just 1,461 new, privately owned housing units were issued building permits nationwide in October 2019, according to the U.S. Census Bureau, a slight increase from the 1,281 units issued permits in October 2018. This follows a fairly consistent upward trend, with seasonal ups and downs, since 2011.
“Unfortunately, construction is largely happening in the higher-price tiers, and it’s not because (developers) don’t want to build on the lower end,” Kushi says. Labor shortages and regulatory constraints in many parts of the U.S. mean developers are focusing on properties that will offer the highest yield to offset higher building costs, hence more luxury housing.
New construction in the outer suburbs of major metro areas appears to promise more affordable options for many first-time homebuyers, though they may have to accept a longer commute for the sake of owning property. It’s in these outer suburbs – filled with new construction or existing homes – that many millennial homebuyers are looking to purchase, Kushi notes.
Expect trends in rental rates to remain fairly reactionary to the homebuying market throughout the year, as people examine their financial situation to decide when is the best time to buy.
Real estate information and marketing site Homesnap predicts that renters who are hesitant or unable to buy a home in their local area will extend their rental agreements, remaining where they are to save as much as possible.
Rents are still expected to grow throughout the year. Zillow predicts that rents will grow faster from the start of the year through the spring, but will slow to 2% year-over-year growth by the end of 2020.
Expect to see rental rates rise faster in areas that are seeing significant population growth based on rising demand, like Myrtle Beach, South Carolina, and Fort Myers, Florida. However, in parts of the U.S. where home prices will remain affordable, many of these new residents will opt to buy, so rent growth will probably be less significant.
Originally published here.
If you’re hoping to secure a new address in 2020, you’ve picked an excellent time to enter, or re-enter, the real estate market. Interest rates are still near record lows, and in many areas across the country, buyers are in the driver’s seat with plenty of available inventory.
However, even with an excellent climate for buyers, it’s unlikely you’ll be able to jump into the housing market in the coming year without at least some preparation, specifically around securing the best possible mortgage.
Consider this your checklist for making homeownership a reality in 2020:
- Review your income and spending.
- Sock away that down payment.
- Tune up your credit score.
- Gather your paperwork.
- Choose a broker.
Review Your Income and Spending
Before you can buy a home, you must have a thorough understanding of your current income, assets and expenditures across all categories. This will be integral to establishing your new home budget, and it will also help you obtain a great mortgage rate.
Review your investments, banking and credit card statements thoroughly for accuracy and start to ferret out any unnecessary expenses. While you’re at it, evaluate your income to see if it can be increased over the near term. Is it time to ask the boss for a raise? You could also consider looking for a higher-paying job, but keep in mind that changing industries or moving from a salary-based position to a commission-heavy role might raise a red flag for lenders.
Lastly, take some time to review your current housing spending, including rent or mortgage, insurance, monthly homeowners association fees, taxes and maintenance. Are you comfortable with the amount? If not, how much more or less would you ideally like to spend each month?
Sock Away That Down Payment
Many experts agree that homebuyers should aim to have a 20% down payment ready when looking for a new house. While there are many mortgage options that allow for a lower down payment, they typically require private mortgage insurance or a similar regular payment. PMI helps protect lenders if you default on your mortgage, and the lower your down payment and credit score, the more you’ll have to pay for PMI, taking a bigger chunk out of your monthly housing budget.
Many HOAs, cooperatives and condominiums require a 20% minimum down payment. Also, a down payment of that size will save money over the life of your mortgage. For example, paying 20% down on a $300,000 home with a 30-year mortgage could save you more than $54,000 over the life of the loan, compared to a 5% down payment.
Tune up Your Credit Score
Income, down payment and credit score are the three driving factors behind what your home loan will actually cost you. Because it can take several monthly reporting cycles to address credit report issues, you can never start boosting your score too soon. The first step is to request copies of your full credit report from all three reporting agencies. While credit score websites like Credit Karma can be great for tracking your score, start with reports directly from each bureau – Equifax, Experian and TransUnion – to ensure you’re reviewing the most recent information straight from the horse’s mouth, so to speak.
Check each statement thoroughly for errors and mistakes and remedy any mistakes using the exact instructions found on the report. Next, pay down revolving balances as much as possible while still meeting your down payment savings goals. Pro tip: Improving your utilization ratio – the percentage you owe divided by the total credit line – will typically drive up your credit score more than paying off any single card. Aim for a 30% or lower utilization ratio for all credit cards.
To keep your credit score at its highest, you’ll also want to avoid any major credit purchases or opening any new lines of credit. It couldn’t hurt to engage a credit monitoring service to prevent any fraud during the critical mortgage application process as well.
Gather Your Paperwork
This is the perfect time to organize all the paperwork necessary to buy a home. A typical mortgage application will require the following:
- Federal and state tax returns for the last two years plus associated W-2 or 1099 forms.
- Complete statements for all bank accounts for the last two months.
- Two months of statements for investment accounts plus quarterly reports from your 401(k).
- A detailed monthly debt schedule, including all loans and credit accounts, issuer, balance due and minimum monthly payment.
- Income statement or letter of employment.
- Additional records required may include proof of rent payments, recent divorce decrees, past bankruptcy or foreclosure information, gift letters if anyone is gifting a portion of your down payment and so on.
If you’re self-employed, you’ll need to prepare profit-and-loss statements and balance sheets to verify your income. Additionally, if you’ll be purchasing shares in a co-op building, you’ll likely be asked to submit a comprehensive application as well as personal references.
Choose a Broker
While anyone can pull up online listings and visit open houses, a wise real estate agent specializing in your local area is indispensable when it comes to saving time, energy and money. From housing starts to mortgage rates and sales trends, there’s a sea of data available on the real estate economy. Trying to make heads or tails of it all and what it means to your specific goals is a challenge, especially when much of it is written for a national audience or a specific editorial agenda.
The “boots on the ground” understanding that an agent provides for your homebuying objectives is invaluable. He or she will guide you through the ins and outs of your local inventory and market trends, and will act as your advisor and champion through the offer and closing process. A skilled Realtor or agent will also have a time-tested network of professionals – from attorneys and lenders to contractors and landscapers – who can help close the deal smoothly and turn your new house into your dream home.
How can you make sure you’re selecting the best real estate agent for your needs? Face-to-face interviews are a crucial part of the process. Ask your potential agent about his or her experience in the area, communication style and availability. Don’t forget to inquire about fees that you may be asked to cover, as well as any recent success stories and references the agent can provide.
With just a few weeks left in this year, and this decade, now is the time to start preparing if buying a home is on your 2020 to-do list.
Originally published here.
In today’s low-inventory housing market, homebuyers are looking for any way to get a leg up on the competition when putting in an offer on their desired home.
If you have the means, an all-cash offer is a great way to fast-track a deal. A seller is more likely to accept your offer, and the success of the deal isn’t reliant on a lender’s OK following an appraisal. You’ll also own the home outright after the transaction with no mortgage to pay each month.
Cash transactions make up a minority of home purchases: All but just 14% of recent homebuyers financed their purchase, according to the National Association of Realtors’ 2019 Profile of Home Buyers and Sellers.
Two reasons to pay cash for your home are:
- Cash offers stand out.
- You can avoid taking on debt.
Cash Offers Stand Out
Especially in a market where homebuying is extremely competitive, an all-cash offer can provide the needed leg up to get the seller to consider your offer more seriously than others. You may not even be the highest bidder, but the seller knows a cash offer will make the closing process easier.
“All things being equal, it’s very likely that your offer would be the most attractive that they’d be considering with limited risk for the seller,” says Marcy Keckler, vice president of financial advice strategy for Ameriprise Financial.
If you want to set yourself apart from other buyers but still have a mortgage, you could use the cash to your advantage in the offer and then finance after closing. “You could differentiate yourself and get a loan later,” says Justin Vedder, chief operating officer of origination solutions at Altisource, a provider of transaction and management solutions to the real estate and mortgage industry. However, you wouldn’t want to make this part of your plan unless you know that your credit history and the market value of the house would guarantee an approved loan, or that you have enough cash if you can’t mortgage the property.
You Can Avoid Taking On Debt
By paying cash, you won’t have to make monthly payments to a lender, and when the house increases in value, that directly boosts your personal wealth.
It’s also important to remember that by financing, you take on additional costs with loan origination fees and the interest paid over time, so “your net cost of purchasing is going to be less if you’re paying cash,” Keckler says.
Even if you have enough cash on hand to purchase a home without a loan, is it always a good idea? Here are five reasons not to buy a home with cash:
- You need to maintain liquidity.
- You qualify for a favorable mortgage.
- Your money may be better invested elsewhere.
- You could capture a sizable tax break.
- There’s no guarantee home values will continue to increase.
You Need to Maintain Liquidity
It’s not wise to purchase a home with cash if you have just enough to pay for it. It’s a good idea to maintain an emergency fund that will sustain you for at least a few months if you were to lose your income. You’ll also want to have some cash on hand for any number of unexpected house needs, from a new roof to a furnace that’s on its last legs.
“It’s especially important that if you’re a homeowner that you have enough other money available to pay for things that might come up,” Keckler says.
You Qualify for a Favorable Mortgage
If you have enough cash to purchase a home outright, lenders will likely view you favorably for mortgage options. With a down payment of 20% or more, you don’t have to worry about mortgage insurance with a conventional loan, and you’re more likely to get a lower interest rate due to the fact that lenders see you as less likely to default on the loan.
First-time homebuyers aren’t just more likely to borrow money, but they’re more likely to borrow more since they don’t yet have equity in a house to help cover a down payment. This group, which makes up 33% of recent buyers, also tends to put less cash down in a purchase: The NAR report notes first-time buyers surveyed typically financed 94% of the home, while repeat buyers financed 84%.
“People are pretty comfortable with taking on debt,” Vedder says. He notes that younger generations’ familiarity with student loans and other financing make taking on a mortgage an easier choice than for older generations.
Following the recession’s historic lows, interest rates may be on the rise but remain low compared to previous decades. With enough cash to put down 20% on a home with a fixed-rate mortgage, you could keep a large portion of your assets liquid and pay 3.625% in interest, which is the average for a 30-year fixed-rate mortgage at Wells Fargo as of mid-November 2019. Plus, with the significant down payment, you can avoid paying private mortgage insurance. Compare that to October 1981, when mortgage rates hit an all-time high of 18.45%, according to FedPrimeRate.com.
Your Money May Be Better Invested Elsewhere
Even if you’re looking to buy a home outside a pricey metro area, with enough cash to pay for a home outright, you’re likely sitting on a pretty big pile of money. But the decision isn’t necessarily between buying a property outright or keeping money idling in the bank. Consider other forms of investment that may yield higher returns than the interest you’ll save by paying cash.
You could consider investing in stocks, mutual funds or a personal business you feel confident will bring greater returns. Keckler is quick to point out, however, that no investment is a sure thing. As with a home purchase, there is risk when investing your money anywhere.
You Could Capture a Sizable Tax Break
All homeowners with a mortgage can receive a tax break on the interest paid to the lender. “The interest (tax break) you accrue when you pay on the loan is huge,” Vedder says.
This benefit does apply to a small share of homeowners, however. Following federal tax reform passed at the end of 2017, the mortgage interest tax deduction has been limited to a total of $10,000. While residents in parts of the U.S. with particularly high local property taxes are affected by this measure, most homeowners in the U.S. do not exceed the $10,000 limit. In addition, increases to the standard deduction starting in 2018 made it so fewer people need to file itemized tax returns, which is where the mortgage interest deduction would occur. If you’re taking the standard deduction, you do not receive a separate mortgage interest deduction. The Urban-Brookings Tax Policy Center estimated in 2018 that the changes would reduce the number of homeowners who receive the deduction from 21% to 9%.
There’s No Guarantee Home Values Will Continue to Increase
Home prices are on the rise and are at an all-time high in many housing markets. Prices are expected to continue to rise in the near future at a slower pace, with signs of a slowing market already affecting larger metro areas. But if the housing market crash in 2008 was any indication, there’s no such thing as a guarantee in real estate.
“A lot of people feel that (because) the market fell out in 2008, putting all your money in your home is a big risk,” Vedder says.
Frequently Asked Questions About Buying a House With Cash
Is it better to buy a house with cash? Whether you should pay with cash or finance your home purchase depends on your financial situation. Paying cash will make your offer more attractive to the buyer, and you will own the property outright. But if you don’t have the funds to pay for a house with cash, a mortgage can help you reach homeownership sooner.
Whether you decide to purchase your home with cash or take on a mortgage, go with what you feel most comfortable with. Keckler notes that zero financing might provide a greater sense of security emotionally, even if it’s not the same guarantee financially. “It may be a big sigh of relief to just know that you own the home outright and that you don’t have to worry about mortgage payments,” she says.
How long does it take to buy a house with cash? Instead of taking a month to close for loan underwriting and approval, buying a house with cash can take just a few days. But you shouldn’t skip aspects of the due diligence process that lenders often require. An appraisal can help ensure you aren’t overpaying for the property, and an inspection will tell you what issues may exist in the home.
What are the closing costs if you buy a house with cash? You won’t have a down payment, loan origination fees or points to cover at closing. While many closing costs become optional when there’s no lender to require them, paying for a title search and title insurance, inspection, survey and more can help reduce your chances of buyer’s remorse down the line.
originally published here.
Owning a home is a major milestone many Americans expect to achieve in their lifetime. It’s not simply about having the ability to stay in one place for years – it’s also about taking advantage of the incentives to homeownership, including the financial security to make a major investment and see it grow over time.
Even the millennial generation, which has been slower to become a major part of the homeowner pool than previous generations, now makes up 37% of recent homebuyers, the largest share of the market, according to the National Association of Realtors’ 2019 Home Buyers and Sellers Generational Trends Report, published in April.
Following a decline in homeownership after the Great Recession, the homeownership rate nationwide was 64.1% as of the second quarter of 2019, according to the U.S. Census Bureau. While homeownership has not returned to its historical peak of 69.2% in 2004, it is edging upward again after hitting a 50-year low in mid-2016 at 62.9%.
While buying a house for the first time may be intimidating, no homeowner started the process feeling confident every step of the way. Here’s what first-time homebuyers need to know.
Are You Ready to Become a Homeowner?
Long before you start looking at houses, you must be sure your finances are in order. The process of saving and making strategic financial decisions to ensure your credit history is more appealing to a lender can take more than a couple months if you haven’t already been working toward buying a house.
“I would say a year plus – and make sure you’re saving toward that goal over a period of time,” says Amin Dabit, vice president of advisory services for Personal Capital, an online financial advisory and wealth management company.
1. Credit history. Run a credit report on yourself – which is free to do once a year and doesn’t affect your credit by going to annualcreditreport.com and receiving a report from each the three major credit-reporting agencies – and focus on the areas you can improve. You may have credit card balances to pay off, or a few missed student loan payments from a couple years ago. You may also simply need more time to pass from a recent borrowing mistake. The more time that passes from the last blemish on your credit report, the less likely a lender is to consider it a red flag to give you a loan.
2. How much house can you afford? How good your finances look from a mortgage lender’s perspective isn’t the only thing to examine. You should also look at savings that can be used toward a down payment and determine how much you’d be able to afford on a monthly basis for your principal mortgage payment, interest, taxes and insurance, which Dabit recommends calculating as 28% of your gross income. “That’ll help you figure out how much you can borrow and sustain long-term,” he says.
3. Savings for down-the-road expenses. You also have to take into account maintenance and other potential costs that may come up as a homeowner. If you live in a particularly competitive or pricey market, such as San Francisco or the District of Columbia, it’s reasonable to expect your monthly costs to be higher than 28% at the start.
4. Who should you consult? Once you’ve examined your financial history and expected future cash flow, it’s time to start talking to the professionals who will be able to help you throughout the process of buying a house.
A natural start is with a real estate agent. Once you’ve found an agent you can trust, he or she can help you find a financial advisor if needed, a loan officer connected with a lender, a real estate attorney, a title insurance representative, a home inspector and many more faces that will be part of your transaction.
“The agent’s really the core source of all those, or at least can be,” says Josh Heyer, a licensed real estate salesperson with Triplemint, a full-service brokerage in New York City.
Approach the process as assembling a team of people who will help you achieve homeownership. With each person, you want to feel confident that the professional will work in your best interests. Heyer recommends not only speaking with multiple professionals regarding your mortgage and home inspection, but also interviewing several agents at the start.
“I want you to be comfortable with me throughout this entire transaction, and I would rather you meet with a variety of agents first to make sure that I am the one you want to work with going forward,” Heyer says.
What Mortgage Options Are Best for You?
When it comes to finding a mortgage, explore options with different lenders and the various products offered. Major banks, credit unions and nonbank lenders offer a variety of options to better fit your specific needs as a homeowner.
The key to figuring out which program is best for you is determining how much cash you have for a down payment. By putting 20% of the home price down or paying for private mortgage insurance for a smaller down payment, you can qualify for a conventional mortgage.
Alternatively, you can put less money down with other options, like an FHA loan through the Federal Housing Administration, which requires less money down and a less impressive credit history but typically comes with a higher interest rate. Veterans are able to take advantage of VA loans, backed by the U.S. Department of Veterans Affairs, which require no money down but have additional fees.
There are many loan product varieties, and your interest rate can be fixed, most commonly in the form of a 30-year, fixed-rate mortgage, or adjustable, known as an adjustable-rate mortgage, which remains fixed for a specified number of years before changing gradually toward the industry rate.
In finding the mortgage product that works best for your financial situation, it’s essential to prequalify or get preapproved for a mortgage amount. This will let you know how much your lender is willing to loan you to buy a house.
But don’t take that maximum approved number as the price you should pay for a house. “In most cases, you shouldn’t borrow the maximum amount that a mortgage lender tells you (that) you can borrow,” Dabit says. Otherwise, you may find yourself having to skimp on other typical expenses, like food, for a few years or more.
Originally published here.
Maybe it’s the sparse foliage or the colder weather, but decorating for fall and winter holidays seems so much more important – and more inviting – than any other time of year. With frequent family gatherings during Thanksgiving, Hanukkah and Christmas, among other holidays, creating a cheerful, gracious atmosphere for guests is de rigueur.
Whether you’ll be decorating on a dime or are ready to call in the pros, here are five tips for making your home safe, inviting and delightful during the holiday season:
- Hire professional decorators.
- Make your own decorations.
- Keep safety in mind.
- Make guests feel welcome.
- Remember your pets.
Outsource Your Holiday Chores
For magnificent holiday decor with minimal effort, tapping into professional decorators is a wonderful time-saver during the busiest, most stressful time of year. While some contractors work exclusively outdoors, creating lighting extravaganzas to rival that of Clark Griswold in “National Lampoon’s Christmas Vacation,” many full-service holiday decorators offer extensive interior and exterior services encompassing stoops, stairwells, fireplaces, Christmas trees, dining tables and more.
Check your local business listings, homeowners association and personal network for recommendations, and be sure to ask all the right questions before signing up. For example, what exactly does the quote include? How long does installation take? What items are you buying and what components are you renting during the installation? If fresh foliage will be used, how should it be cared for and how long should it be expected to last? What are your options if anything begins to wilt or sag unexpectedly? Does the contracted price include post-holiday undecorating, and if so, how do you go about scheduling the removal?
Make Merry While Saving Money
If the expense of a professional decorator is out of reach, fantastic holiday decor is easily achievable on a small budget. In fact, handmade decorations often last longer, have a warmer appeal and provide an excellent opportunity to get creative while spending time with family and friends.
Garlands are a marvelous way to make gorgeous tree trimmings on the cheap. Gather up old buttons, beads, sequins and ribbon, or add in traditional organic elements like popcorn and cranberries, and let your imagination run wild. Bunting, bows, and banners for all variety of holidays, plus wrapping paper and ribbons, can be found on the cheap online, at dollar stores or post-holiday sales.
An upfront investment on exceptional quality, say for well-made keepsake ornaments, stockings, menorahs and nativity sets, can last for years to come rather than ending up on the curb come New Year’s Day.
Be Sensible About Safety
Whether you take a hands-off or a hands-on approach to holiday decorating, safety should always be your No. 1 consideration. Between jack-o’-lanterns, Christmas trees, holiday cooking and Hanukkah candles, the fall and winter months can be a dangerous time for residential fires. U.S. fire departments respond to nearly 1,000 incidents each year from Christmas trees and decorations alone, according to the National Fire Protection Association. Be mindful of all open flames and fireplaces, keeping them well clear of kids, pets and flammable decorations.
Even better, choose battery-operated candles wherever possible. Double-check all twinkle lights to make sure cords are in good order, and supervise all holiday cooking. Lastly, check those smoke alarms and ensure your family has an evacuation plan in order should something go wrong.
Of course, safety extends far beyond fire prevention. Keep doors and windows locked, alarm systems on and gifts out of sight to help prevent thefts. Keep small kids away from choking hazards, and for those of you in colder climates, clear snow and ice from walkways and stairs.
Make Guests Feel Welcome
A beautifully arranged guest room can do wonders to lift the moods of travel-weary friends and family.
Take a five-senses approach to decorating guest accommodations: High thread-count linens, fluffy towels, and thick comforters tend to the sense of touch, while candles, soaps and fresh flowers provide an inviting aroma. Consider including plenty of reading materials and noise-canceling headphones for jet-lagged visitors. And who can resist a plate of fresh-baked cookies, a bowl of in-season fruit and a small coffee pot or electric tea kettle?
Don’t forget to add little conveniences like space for hanging clothes, a suitcase stand, a selection of toiletries and a handwritten welcome note with the Wi-Fi password and agenda, if any. Even if your accommodations are more pull-out couch than a private guest suite, you can still deliver a gracious welcome with a small side table and gift basket devoted to the items above.
Don’t Forget Your Fur Family
Pets often need special care and attention during the holidays, especially if they’re not used to a bit of hustle and bustle. Make sure cats and dogs have a safe and quiet place to retreat if you’re expecting guests or trick-or-treaters, and be aware of the many toxic plants that are common during the holiday season, including poinsettia, holly and mistletoe.
Whether as a climbing post or a tug-of-war partner, a Christmas tree is often irresistible to our four-legged-friends, so ensure that trees are securely anchored and supervised at all times. Advise family members and houseguests to avoid handing out human-food treats to furry beggars, monitor all open flames, and avoid tinsel (a serious digestive hazard) in pet-friendly homes entirely.
Often equally joyous and stressful, the holidays can be a heady, busy time. But they’re also when our warmest, most long-lasting memories of home and family are created. With a little bit of thoughtful planning and a whole lot of patience, the holidays can be merry, bright and safe for all.
Originally published here.
MORTGAGES COME WITH many options, and one of them is your loan term: a 15-year versus 30-year mortgage. A 30-year mortgage can make your payments more affordable, but a 15-year mortgage is generally cheaper overall. As you’re weighing your mortgage options, here are the most important things to know about 15- and 30-year mortgages.
How a 15- vs. 30-Year Mortgage Works
A mortgage is a type of term loan, meaning the amount you borrow is repaid over a set period of time. You make principal and interest payments according to an amortization schedule that’s set by the lender. Your monthly payment schedule may also include homeowners insurance and property taxes if those are escrowed into your payment. Private mortgage insurance is also added when applicable, usually when you buy a home with less than 20% down.
When you have a 15-year mortgage, the total amount you have to repay is spread out over 15 years, or 180 payments. If you choose a 30-year mortgage instead, you repay the loan over 30 years, or 360 payments.
What’s Good About a 15-Year Mortgage
There are several good reasons to choose a 15-year over a 30-year mortgage.
Pay the home off more quickly.
“The monthly payments will be larger, allowing more money to go to the principal in a shorter amount of time,” says Benjamin Ross, a real estate agent in Texas. Your loan balance disappears faster, which might be important to you if you envision a retirement that doesn’t include mortgage debt.
Lower interest rate.
Because you’re paying your home loan off sooner with a 15-year term, your mortgage becomes less risky for the bank. That may translate to a lower interest rate compared with a 30-year loan. Depending on the overall interest rate environment, rates for a 15-year mortgage may be a half a percentage point or more lower than 30-year mortgage rates.
Less interest total over the loan term.
A lower interest rate also benefits you in another way when adding up the total interest paid on the loan. Here’s a simple side-by-side comparison of the total interest paid on a $300,000 mortgage.
(Note: These calculations don’t include PMI, homeowners insurance or property taxes escrowed into the mortgage.)
|15-YEAR MORTGAGE TERM||30-YEAR MORTGAGE TERM|
|Interest rate: 3%||Interest rate: 3.625%|
|Monthly payment: $2,072||Monthly payment: $1,368|
|Total interest paid: $72,914||Total interest paid: $192,535|
In this example, choosing a shorter loan term and qualifying for a lower interest rate results in a total interest savings of $119,621. That’s a substantial amount of money you could keep in your pocket over time.
Build equity faster.
Home equity represents the difference between what your home is worth and what you owe on the mortgage. When your monthly payment is larger because your loan term is shorter, you can build equity at a quicker pace because you’re paying more of the loan principal down each month compared with what you would with a longer mortgage.
15-Year Mortgage Drawbacks
What’s great about 15-year mortgages versus 30-year mortgages is also what makes them less attractive for certain homebuyers: a larger monthly payment.
Going back to the previous example of a 15- vs. 30-year loan, the mortgage payment for the 15-year option is $704 higher. A $2,000-plus monthly mortgage payment may not be realistic for every budget.
“A lot of people are more concerned with ensuring that their monthly payment is manageable than the total interest paid over the life of the loan,” says Anthony Sherman, co-founder and CEO of Simplist, a digital mortgage marketplace. “Paying off your mortgage over a longer period of time can free up cash to do other important things, like investing, saving for college or retirement, and paying for renovations.”
Another reason to reconsider a shorter loan term is how long you plan to stay in the home. If you plan to move within the next five years, for example, then being able to build equity faster or get a lower interest rate on the loan may not be as important in your decision-making about which kind of mortgage to get.
What’s Good About 30-Year Mortgages
A 30-year home loan also has its advantages. Here’s why you might prefer a longer loan instead:
Lower monthly payments.
You don’t need to be a math genius to understand that a longer loan term can make your payments lower. That might be attractive if you want to be able to work on other financial goals while you pay down your home loan. If you’re getting a larger mortgage, being able to pay over 30 years could make the payments more affordable for your budget.
While you’re agreeing to a 30-year mortgage term, you can still choose to make extra payments. That could help you pay the loan off ahead of schedule.
More potential for tax savings.
Interest on home loans is tax-deductible. When you have a 15-year loan, you’re paying off more of the interest upfront, so you may not benefit from the tax deduction as long as you would with a 30-year mortgage instead.
30-Year Mortgage Drawbacks
There are some drawbacks to choosing a 30-year home loan over a shorter term.
As the earlier example showed, the biggest drawback is interest. Not only can you end up with a higher interest rate on a 30-year mortgage, but you’ll also pay more total interest on the loan. That assumes, of course, that you stick with the same loan term and don’t refinance to a shorter mortgage at any point.
Refinancing from a 30-year loan to a 15-year loan could save you money if you’re able to get a lower interest rate. Whether refinancing makes sense depends largely on the difference between your current interest rate and the rate you’d qualify for, as well as how much you still owe on the mortgage. Keep in mind that refinancing may involve an upfront expense since you have to pay closing costs. You could roll those into your loan, but that can nudge your monthly payments higher.
Another drawback is that you’ll take longer to build equity with a 30-year loan, since you’re paying a smaller amount toward the interest and principal each month. That could be a disadvantage if you were hoping to take out a home equity loan or line of credit at some point to consolidate debt or finance home improvement projects.
How to Choose a Mortgage Term
The best way to evaluate whether a 15- or 30-year mortgage is better is to consider your plans and priorities.
Specifically, think about:
- How long you plan to stay in the home
- Whether you’d like to tap into your equity eventually
- The amount you plan to borrow and how much you’ll put down
- What size mortgage payment you can reasonably afford
- How a mortgage payment affects your ability to pursue other financial goals
Timing is particularly important because of how mortgage payments are structured.
“In the first 10 years of the loan, over two-thirds of your monthly payment is comprised of interest,” Sherman says. “So, if you don’t plan on living in your home for more than 10 years, you’ll end up paying a lot of interest but only paying down very little of the original principal.”
Thinking big picture, in terms of your larger financial goals, can help you decide which loan option is a better fit for your situation.
“If the goal is to build quick equity and pay off the loan sooner, the 15-year plan is a good one,” Ross says. “If one is buying a home long term and has no intent on using equity, perhaps a 30-year loan would be more appropriate, especially if they can’t afford the higher monthly payment.”
When in doubt, run the numbers through a mortgage calculator using 15- and 30-year terms. This can put the short- and long-term financial implications of either loan in perspective.
Originally published here.